Thwarting the foreclosure 'walkaways': editorial

A federal probe of mortgage banking abuses launched in the wake of Plain Dealer reporter Sandra Livingston's expose last year of how banks can park foreclosed properties in a legal limbo to save money has recommended some common-sense practices.

In a study released this month, the Government Accountability Office suggests more transparency, such as notifying borrowers when banks decide to bypass foreclosure.

It's a welcome first step, but still just a beginning. Banks cannot be allowed to use money-saving "walkaways" to avoid their responsibilities for properties on which they've foreclosed -- especially when the consequence is value-sapped neighborhoods and prior owners unjustly tagged for ongoing violations.

Walkaways refer to cases in which a bank has won a foreclosure decree in court but neither takes title to the property nor attempts to dispose of it through a sheriff's sale or other means. Instead, the property -- still in the owner's name -- sits in title limbo.

This effectively leaves the homeowner -- sometimes long gone and under the misimpression that the property is now in someone else's name -- on the hook for accumulating taxes and code violations. And it leaves the neighborhood with one more eyesore.

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